Small projects may have big impacts on market dynamics, study finds.
The article compares two ways of evaluating the impact of policies on markets: partial equilibrium and general equilibrium. When markets are perfect and the policy is small, both methods give similar results. But when changes are bigger, they can lead to different outcomes. In these cases, we need to use different tools to measure people's willingness to pay for changes in prices. This information is more detailed and may be easier to understand for graduate students in economics.